At the University of Toronto last week, tech startups associated with the Creative Destruction Lab came together to present their companies and get feedback from rooms packed with venture capitalists and angel investors.

Prageet Nibber, co-founder of Calgary-based ReWatt Energy got a rough ride. After they finished their presentation the first person to speak was Bart Copeland, CEO of ActiveState Software and an active investor in early-stage technology companies.

“I don’t understand what these guys do,” Copeland said. “They use blockchain, AI and ML, the three hottest things. It feels like you’re just playing on the tag cloud right now.”

Speaking to the Financial Post afterwards, Copeland said too many startups are just chasing the flavour of the week.

ReWatt wasn’t the only company that got this kind of response; in a different session, after a presentation proposing to use the blockchain for secure medical prescriptions, a potential investor complained of “blockchain fatigue.”

Several investors said that tech money tends to rush towards the latest fad. Back in the 1990s it was the dot-com boom. More recently it’s been blockchain and artificial intelligence.

The blockchain frenzy has been especially intense, because the underlying secure leger technology has been so closely tied to Bitcoin and other cryptocurrencies. That’s given regular retail investors an opportunity to get in on the action and drive the hype in a way that they couldn’t do with other early-stage tech startups.

Blockchain technology, which creates an indelible ledger to record transactions, has plenty of potential applications beyond digital currencies, and the investors who spoke to the Financial Post all said they’re still willing to bet on startups who are using the technology in sensible ways.

They’re just sick of the hype.

“Sophisticated investors are very quick to sniff out companies that have just attached blockchain to their existing story to make it more exciting,” said Andrew Schoen, principal at New Enterprise Associates, an American venture capital firm.

“It is a small subset that’s truly well-suited to blockchain.”

Jaafer Haidar, on the investment team at Brightspark, joked that the hype is shifting to artificial intelligence, and these days the best way to get extra funding is to put “dot ai” at the end of your company name.

But Haidar said that the frenzy is over for serious investors.

“At this point, we understand the blockchain. Show me what you’re doing with it, and show me how it’s a business,” he said.

“The companies that are really using the blockchain for its transformative effect in supply chain management, contracts, et cetera, are doing that work now, and we’re going to see that come to fruition when all this crpyto hype has blown over.”

Raj Lala, CEO of Evolve ETFs, which has an actively managed blockchain fund, said the companies he’s most excited about are the companies like IBM, Microsoft, Visa and Accenture, who are deploying blockchain technology in interesting ways, such as secure inventory tracking.

Nibber said in the case of ReWatt, blockchain is a minor part of their company, which aims to offer a suite of services for companies operating power plants and marketing energy.

She said in 2016 when they were just getting started, nobody cared about blockchain. Then last year with the spike in crpyocurrency prices, she said mentors were encouraging her to emphasize blockchain whenever possible with investors.

And now as the company works to secure investment as part of a $1 million round of seed funding, she said she can see the investor attitudes shifting again.

“The questions are getting far more detailed. People are starting to do their research and understand where blockchain makes sense, and where it doesn’t,” Nibber said.

“They’re harder questions for us to answer, but I think it’s an important shift.”

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